China’s interests going up in flames in Myanmar

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Black smoke billows from the industrial zone of Hlaing Thar Yar township in Yangon, Myanmar Sunday, March 14, 2021. Attacks on Chinese-run factories in Myanmar's biggest city drew demands Monday from Beijing for protection for their property and employees, while many in Myanmar expressed outrage over China's apparent lack of concern for those killed in protests against last month's military coup. Myanmar state media have reported that martial law was declared in six districts in Yangon, including the major industrial zones of Hlaing Thar Yar and Shwepyitha. (AP Photo)
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When unknown assailants torched at least ten Chinese-financed factories in Yangon’s Hlaing Tharyar Industrial Zone, Beijing was quick to urge Myanmar’s military leaders to ensure security for its investments.

China’s state-run Global Times newspaper, often a reflection of Beijing’s unvarnished but not publicly stated official views, said it “strongly condemned such barbaric acts.”

At the same time, the mouthpiece outlet tried to strike a middle ground in the nation’s escalating street conflict, where military forces are intensifying their lethal assault on unarmed protesters.

An estimated 74 anti-coup protesters were killed on March 14, bringing total protest-related fatalities since the February 1 coup to 183, according to the Assistance Association of Political Prisoners, an independent monitoring group.

Neither side claimed responsibility for the Chinese factory attacks, with protest leaders quoted as saying they were torched by plainclothes security forces, not the Civil Disobedience Movement (CDM). Senior General Min Aung Hlaing’s junta regime, however, claimed protesters were responsible.

“China holds friendly ties with all parties in Myanmar. No matter which party holds power, Myanmar maintains friendly cooperation with China,” the paper’s op-ed said. “Those who maliciously defame China and instigate attacks against Chinese factories are common enemies of China and Myanmar, they must be severely punished.”

The Chinese Embassy in Myanmar released a statement in the Burmese language on its Facebook page in response to some Chinese factories that “perpetrators destroyed, raided and lit on fire.”

The embassy said the now-affected businesses are mostly garment businesses invested by Chinese companies, which also created over four million job opportunities. Asia Times could not independently confirm that Chinese factories and related services provide four million jobs in Myanmar.

“China calls Myanmar to take effective actions and investigate and punish the arsonist in accordance with the law and ensure the safety of the lives and properties of Chinese businesses and people,” the statement said.

The generals were quick to act on China’s request as Myanmar state television announced the imposition of martial law for Yangon’s Hlaing Tharyar soon after the factory assault. More townships were placed under martial law on Monday with a total of six townships including Hlaing Tharyar in Yangon and five townships in Mandalay except for Amarapura.

Taiwan’s de facto embassy in Myanmar advised Taiwanese firms to hang signs in Burmese and Taiwan flags in front of their factories to indicate the facilities were Taiwanese, not Chinese, owned. Taiwanese shoemaker Tsang-Yih was among those torched in Hlaing Tharyar on Sunday.

China faces a rising dilemma in Myanmar’s conflict. The Chinese Community Party has traditionally had close relations with Myanmar’s generals, providing them crucial diplomatic backing and investment when they sanctioned and ostracized by the West from 1988 until 2013.

China was Myanmar’s biggest investor from 1988 until 2019 with over $20 billion in outlays, representing 26% of the country’s total FDI according to Myanmar Investment Commission data. Singapore bypassed China in terms of total FDI in 2020.

Much of that Chinese investment has gone into extractive sectors, namely hydropower, oil and gas, and mining. It has also gone into low-end manufacturing including textile production, which were among the type of plants set ablaze over the weekend.

Many of China’s investments are controversial. They include the $3.6 billion Myitsone Dam project in northern Kachin state, which seeks to dam the nation’s vital Irrawaddy river, flood an area the size of Singapore and export 90% of the power generated to China.

It was suspended by then-president Thein Sein in 2011 after a public outcry, marking one of the first times a military-aligned government appeared to respond to popular pressure against a big-ticket infrastructure project.

China is also pumping in billions of dollars worth of Belt and Road Initiative (BRI) projects, including a deep-sea port and special economic zone at western Rakhine state’s Kyaukphyu. Chinese investors are also involved in a “new city” project in Yangon, which if completed promises to transform the complexion of the colonial era former capital.

With those deep and wide commercial and strategic interests, Beijing has found it difficult to navigate a middle path through the coup crisis.

Chinese Ambassador Chen Hai has said the coup was “absolutely not what China wants to see” but avoided denouncing the putsch outright by saying Beijing viewed it as a “change of political situation” and an “internal affair.”

Chinese state media Xinhua has also avoided the word “coup” and instead referred to the suspension of democracy and establishment of emergency rule as “a major Cabinet reshuffle”, despite the junta’s detention of civilian leaders including elected de facto leader Aung San Suu Kyi.

Anti-coup protesters have taken aim at China’s position, including at a mass demonstration in front of China’s embassy in Yangon. Placards held by protesters in front of the embassy said “Shame on you, China” and “Myanmar’s military dictatorship is made in China.”

The criticism has caused Chinese officials to respond, with Chen hitting back at widespread rumors China is helping the military build an internet firewall similar to its own as “nonsense and even ridiculous.”

Protestors have parodied Beijing’s diplomatic use of “internal affairs” to take rhetorical aim at its crucial investments in the country, with one string on social media asking “whether the [China-invested] gas pipelines are blown up or not is an internal affair.”

The twin oil and gas pipelines extend across the country over 2,000 kilometers north to south and ultimately deliver fuel to southern China from Myanmar’s Kyaukphyu port on the Indian Ocean.

That provides China a crucial transport hedge for its oil and gas shipments from the Middle East which travel mostly through the Malacca Strait, a chokepoint Beijing fears the US could block in a conflict scenario.

Bai Tian, director general of the Chinese Foreign Ministry of Foreign Affairs’ Department of External Security Affairs, asked the generals to assure the security of the pipelines, according to a leaked document circulated in local media.

The document said Beijing expects Myanmar to impose better security measures for the pipelines, noting they are a crucial part of the BRI in Myanmar. Any damage to the oil and gas pipeline would cause huge losses for both countries and also undermine confidence in foreign investment, Bai Tian warned.

“China has the leverage to negotiate with the military as the one who would support Myanmar on a global stage and economically. But will China actually do that, or is it in China’s interests to do that?” said one Myanmar analyst who requested anonymity.

“China is an ally of the generals but most importantly as a neighbor should pressure the generals into a compromise,” said Ko Eric, a Myanmar expert and researcher. “However, Beijing will probably not because they do not wish to see a democratically successful Myanmar as it could encourage pro-democratic movements for China.”

Indeed, the opposite appears to be true. Huawei, the Chinese tech giant, has been accused of providing cameras with facial and license plate identification capabilities which have allegedly helped authorities identify and apprehend protest leaders, according to local reports and rights groups’ statements.

The said cameras have been installed in a first phase of a new “Safe City” initiative that started in December where 335 surveillance cameras were installed in eight townships of Naypyitaw, the administrative capital.

Huawei has denied it supplied the technology but has not clarified how Myanmar sourced the cameras.

“Before the coup, Myanmar’s government tried to justify mass surveillance technologies in the name of fighting crime, but what it is doing is empowering an abusive military junta,” HRW researcher Manny Maung said in a statement critical of Huawei’s alleged role in the surveillance technology.

Over 200 foreign and local companies have signed a statement facilitated by the Myanmar Centre for Responsible Business (MCRB) to state their concern about developments since the February 1 coup.

The signatories include multinational firms such as German company Adidas, American Facebook, Swedish H&M Group, Dutch Heineken, Danish Maersk, Swiss Nestlé and Japanese Nishimura & Asahi and several others.

Kirin Holdings, a Japanese beverage giant, announced that it was ending its partnership with Myanmar military-owned Myanmar Economic Holdings Limited just four days after the coup.

Danish company Maersk, the world’s largest shipping company, stopped using military-owned ports even before the coup and now uses the non-military-affiliated Myanmar International Terminal Thilawa and Myanmar Industrial Port

No Chinese companies, however, have spoken out against the military coup or signed the MCRB statement, which has also been translated into the Mandarin Chinese language.

“Many Chinese businesses possibly have too much investment with the generals to dare to speak out,” said Myanmar expert Ko Eric. “It will benefit future Myanmar-China relations for China to get the support of the Myanmar public.

“There is enough shared historical experience and cultural similarities between the two nations to forge a strong relationship, he added. “They should not have to rely on an isolated military regime to get what they want from Myanmar.”

-Asian Times